Apps R Us made a purchase of $20,000 worth of computer equipment. The equipment is expected to have a useful life of three years, and be worth $2,000 at the end of its useful life. They make a $5,000 down payment on the equipment, and finance the rest with a one-year loan at 12%.
What will the monthly depreciation be for the equipment?
When they purchase the equipment, what entries will show up on each of the financial statements (IS, BS, CF)?
At the end of the first month after the equipment is put into use, waht entries will show up on each of the financial statements?